Project audit ordered by city

Mayor, comptroller seek review of buyout spending on west side

$9.3 million in compensation

April 17, 2001|By Tom Pelton | Tom Pelton,SUN STAFF

In an effort to determine whether money is being wasted, Baltimore's comptroller and mayor have ordered an audit and review of the $9.3 million the city has spent compensating property owners displaced for the west side urban renewal project.

The scrutiny comes in the wake of a recent article in The Sun that questioned $1.3 million paid to the owners of three small stores on Howard and Lexington streets that moved or closed for the project.

The three were among 29 merchants and 32 landowners the city has bought out in the first phase of an 18-block project to build hundreds of apartments and dozens of shops in a run-down area east of the University of Maryland, Baltimore.

Among the payments being reviewed by the city is the $134,752 it paid in February for 6,956 pairs of women's shoes that the owner of Bare Feet Shoes at 201 N. Howard St. did not want to move three doors north to his new shop, city officials said.

"It doesn't seem logical that we pay for all of the inventory of a store that is going to stay in business," said Comptroller Joan M. Pratt. "They can bring the inventory with them."

Mayor Martin O'Malley defended the $9.3 million spent by the city as an investment that will pay off more than tenfold. Bank of America and other private developers plan to invest more than $100 million building apartments, shops and offices.

"We want to stimulate economic growth, but we also want to respect the rights of small merchants who through no fault of their own have fallen in the path of redevelopment," O'Malley said.

Last year, the mayor asked city development officials to be more generous than required in federal guidelines.

The guidelines, written in 1970, require payments of up to $20,000 for businesses that close. O'Malley has said that figure is 30 years out of date and is usually not enough to fairly compensate merchants who have been running businesses in the area for years.

The mayor is unlikely to switch course and start insisting that the city begin paying that amount, said Tony White, O'Malley's spokesman.

O'Malley has asked Baltimore Development Corp., the city's development agency, to try to tighten up its process for negotiating buyouts to determine whether the city can perform them more rapidly and efficiently in the project's second phase.

"There are some situations where we know we didn't broker the best deal for the city," said White.

Sharon Grinnell, chief operating officer of the corporation, said, "We will find a way to improve the process. There is no part of the process that we are not reviewing - cost, timing, everything."

O'Malley has asked City Solicitor Thurman Zollicoffer to review the Bare Feet Shoes case and two others questioned by The Sun, said White.

The other two payments being reviewed by Zollicoffer are $532,570 to the owner of Inner City Records, which was at 201 N. Howard St. but closed; and $652,847 paid to the owner of King of Lexington Jewelry at 240 W. Lexington St., which also closed.

The city paid the owner of Inner City Records $40 each for 4,194 pager numbers, though the chain could have sold the numbers at one of its other stores two blocks east on Lexington Street.

"There were a few things that came up in your [March 29] article that gave us pause," said Zollicoffer.

Many of the displaced merchants have praised the city for being fair and compassionate in compensating them for their losses.

"The city did what it was supposed to do," said Jack Gelman, former operator of King of Lexington Jewelry. "We lost our future, and we lost our livelihood."